John D. Boyd | Aug 04, 2011 11:50AM EDT
FreightCar America, an equipment builder that specializes in coal-hauling railcars, reported improved earnings for the second quarter but pointed to “mixed signals” about the pace of economic recovery.
FCA swung to a $200,000 profit from a $1.3 million loss in the 2010 period, as revenue jumped 35 percent to $97.6 million.
Signs of improved demand included second-quarter deliveries to customers of 1,309 railcars, which was nearly all newly built cars along with 90 leased units. That’s up from first quarter deliveries of 875 new and used cars, and more than double the 2010 second quarter’s 614 deliveries of new, used and leased cars.
Ed Whalen, president and CEO, said the company’s improved April-June financial results “reflect improved demand for our railcars, especially coal-carrying railcars, sales of certain leased railcars and a tax benefit resulting from a change in our effective tax rate.”
But he said “the market continues to send mixed signals concerning the pace of recovery.” He noted that North American rail loadings of coal shrank 2.4 percent in the second quarter from a year earlier, but said that was partly because flooding in the U.S. Midwest and Canada curbed shipments. Year-to-date coal loadings are slightly ahead of first-half 2010.
FCA booked 1,089 new railcar orders in the second quarter, which was up from just 14 a year earlier but down from 4,017 in this year’s first quarter. As a result, the backlog of units to build slipped to 4,986 on June 30 from 5,206 on March 31, although it was up sharply from a backlog of 3,000 units when the 2010 second quarter ended.
Whalen said his team hopes that “the declining level of in railcars in storage, along with the expected railcar replacement cycle, will translate into continued improvement in demand for coal cars.”
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